Stakeholders: Fraud Investigation Service Teams: referral of cases to the Governance Process for large Tax Disputes
There are specific boards in place to deal with our largest and most sensitive cases. These boards are within lines of business, and for the very largest the cross departmental Tax Disputes Resolution Board and the Commissioners get involved.
These processes are mandatory. It is important therefore that case officers consider if the decision they intend to make meets the criteria for referral to one of the governance boards:
- Tax Disputes Resolution Board (‘TDRB’) for any case where the tax under consideration across the whole case is above £100m.
- Large Business Disputes Resolution Board (‘LB DRB’) for customers in large business where the tax under consideration on a single risk* is above £15m
- Enforcement & Compliance Disputes Resolution Board (‘E&C DRB’) and Special Personal Tax Disputes Resolution Board (‘SPT DRB’) for any other customer where the tax under consideration on a single risk* is above £5m
NB. A ‘risk’ is defined within the Code of governance (see ‘Obtaining Further Guidance’ below) as ‘a particular transaction (or series of transactions) or an item in a return or declaration which causes risk to past, present or future revenue flows’.
The following points should be borne in mind when determining whether to refer a case to one of the governance boards.
Before Making the Decision
- If the decision to deny input tax will lead to an assessment, you should make and notify the assessment if it is necessary to do so in order to comply with assessment time limits, without waiting for the outcome of the governance process, so as to avoid any risk of tax going out of time. You will need to inform the customer that the assessment has been issued protectively, and that it will not be enforced until further notice.
- When deciding if a referral to governance is required, it is to be noted that the ’tax under consideration’ includes penalties and Future Revenue Benefit (‘FRB’). It should only include interest ‘where it is a significant factor in the evaluation of the overall amount at risk to HMRC’. If in doubt, contact the Secretariat for the relevant board.
- A referral is also required if it is a ‘sensitive case’, that is, it ‘might have a significant and far-reaching impact on HMRC policy, strategy or operations’, and may also ‘be likely to prompt significant national publicity’. Once again, contact the relevant Secretariat if in doubt.
- The relevant Secretariat should be consulted in any case of doubt or difficulty and, in particular, where a re-evaluation or closure of a risk suggests the case may fall outside the remit of the relevant board.
- For Large Business customers the CRM should be fully engaged in discussions at each stage of the progression of a case, including the referral to governance.
For those cases that meet the governance criteria that are subject to a Statutory Review, Review Officers should contact the relevant Secretariat if they conclude that a decision should be varied or cancelled. It is important that the board is informed whilst respecting the independence of the review.
As from November 2014:
All referrals to Dispute Resolution Boards and other higher governance panels must be reviewed by the Independent Quality Assurance Team (INQUAT). The referral must be made before the submission is made to the governance panel. It should be sent to the INQUAT mailbox (INQUAT, SI (SI)).
All cases going to a governance panel are high-profile, and have the potential to enhance or reduce FIS’s reputation for high quality investigation work. You should of course ensure that your manager is aware of any such cases.
Obtaining Further Guidance:
The Code of Governance for resolving tax disputes
The Tax Assurance homepage
Referrals to Dispute Resolution Boards
FIS Guidance – SIOG1900